Correlation Between Daiyang Metal and SNTEnergy
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and SNTEnergy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Daiyang Metal and SNTEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and SNTEnergy Co, you can compare the effects of market volatilities on Daiyang Metal and SNTEnergy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Daiyang Metal with a short position of SNTEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and SNTEnergy.
Diversification Opportunities for Daiyang Metal and SNTEnergy
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daiyang and SNTEnergy is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and SNTEnergy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNTEnergy and Daiyang Metal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Daiyang Metal Co are associated (or correlated) with SNTEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNTEnergy has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and SNTEnergy go up and down completely randomly.
Pair Corralation between Daiyang Metal and SNTEnergy
Assuming the 90 days trading horizon Daiyang Metal is expected to generate 1.2 times less return on investment than SNTEnergy. But when comparing it to its historical volatility, Daiyang Metal Co is 1.96 times less risky than SNTEnergy. It trades about 0.15 of its potential returns per unit of risk. SNTEnergy Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,528,000 in SNTEnergy Co on September 13, 2024 and sell it today you would earn a total of 129,000 from holding SNTEnergy Co or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daiyang Metal Co vs. SNTEnergy Co
Performance |
| Timeline |
| Daiyang Metal |
| SNTEnergy |
Daiyang Metal and SNTEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and SNTEnergy
The main advantage of trading using opposite Daiyang Metal and SNTEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, SNTEnergy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SNTEnergy will offset losses from the drop in SNTEnergy's long position.| Daiyang Metal vs. Samsung Electronics Co | Daiyang Metal vs. Samsung Electronics Co | Daiyang Metal vs. SK Hynix | Daiyang Metal vs. POSCO Holdings |
| SNTEnergy vs. LG Energy Solution | SNTEnergy vs. Doosan Heavy Ind | SNTEnergy vs. Hyosung Heavy Industries | SNTEnergy vs. Aprogen KIC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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